24 March 2009

I sincerely hope that Mervyn King has a watertight contract, because he has dropped Brown in at the deep end at the Treasury select committee. He spoke about a further stimulus package:

I'm sure the government will want to be cautious in this respect. There is no doubt we are facing very large fiscal deficits over the next 2-3 years.

Given how big those deficits are, I think it would be sensible to be cautious about going further in using discretionary measures to expand the size of those deficits.

The level of the fiscal position in the UK is not one that would say: 'Well, why don't we just engage in another significant round of fiscal expansion?

I trust King had the good sense to time these comments when Brown had already left the UK for his pre-G20 jolly. Otherwise his driver may have been instructed to make a diversion to No 10 on way back to the safety of the Bank of England.

How do you rubbish the Governor of the Bank of England? I am not sure even Mandy could achieve this!